Intraoperative facial nerve monitoring (IFNM) is a suitable technique for intraoperative facial nerve identification and dissection, especially in large vestibular schwannomas (VS) (acoustic neuroma). To evaluate its feasibility for estimating functional nerve outcome after VS resection 60 patients underwent surgery using IFNM. Out of this group the last 40 patients were included in a prospective study evaluating the prognostic value of various IFNM parameters (proximal and distal absolute EMG amplitude, stimulation threshold, and proximal-to-distal amplitude ratio) for prediction of initial postoperative facial nerve function and recovery of function. Stimulation threshold and absolute EMG amplitude proximally at the brain stem were both predictive for postoperative nerve function. Good initial facial nerve outcome (modified House Brackmann grading, mHB°I and °II) was found in 15/16 patients with a proximal EMG amplitude greater than 800 μV and in 19/22 patients with proximal stimulation threshold less than 0.3 mA. Sixteen of 16 patients with proximal stimulation threshold equal to or greater than 0.3 mA had moderate-to-severe facial palsy (mHB°III or worse). Six of six patients without evokable proximal amplitude initially had insufficient nerve function (mHB°IV). Intraoperative decrease of the proximal amplitude was associated with an unfavourable outcome, whereas distal amplitudes usually stayed unchanged. Mean distal EMG amplitudes were also found to be decreased with poor nerve function, which may mean that the tumour had already affected the nerve. A proximal amplitude of 300 μV or less and a proximal-to-distal amplitude ratio below 1:3 were found in the absence of functional recovery in 6/8 (75%) and 5/6 (83%) patients with initial mHB°IV, respectively. Two patients with initial mHB°IV improved to mHB°III despite intraoperative evidence of missing functional nerve integrity. Therefore, functional recovery cannot be predicted by IFNM in all cases of anatomical nerve preservation. We conclude that a minimum follow-up period of 1 year may still be advisable even in certain patients without evidence of intraoperative functional nerve integrity.